Vocal Voices

The last minute bodged deal between Greece and the Troika to gain a 4 month breathing space for Greece.

With both Varoufakis and Tsipras talking election or referendum, things are, yet again, going south.

However, unlike last time, there is no room to move. Germany bound Greece so tightly in the last round that they have nowhere to turn. Eventually political reality will intrude. Namely that Tsipras will have to precipitate action from the electorate which threatens Greek Euro Exit in order to get what he wants. There is no way they are going to make the changes required. They are simply too damaging to both the Greek economy and the Syriza time in government.

More hot air from a city near you real soon now.

I know that this will be worked out sooner or later but right now I have no idea how!

Syriza wants to keep Greece in the Euro. The Eurozone wants to keep Greece in the Euro.

So..... it will be Grexit and the collapse of the Euro sometime soon.

Not quite.

The Eurozone are committed to keeping the Eurozone together but not at any cost. The cost they see is all to Greece and none to the rest of the Eurozone. They don't care if the Greeks suffer. In fact they want suffering as a warning to others who might be willing to go the same way.

Syriza is committed to staying in the Eurozone, but not at the expense of the Greek economy or the Greek's people suffering.

The two positions are completely irreconcilable. Any words or actions to try and make it all make sense are nothing more than shadow games. In the end one or the other will have to concede something massive or Greece exits.

Right now the situation is that if Eurozone governments give in to Greece, the lid comes off, elections are lost and everything goes to pot. If Syriza backs down, then they are out. Permanently!

In that case the noises from Greece vis a vis elections or referendum are more than noise. They are the only possible path for Syriza given that the Eurozone countries do not back down.

Given the situation, I can't see any other option than Grexit. No matter how much it hurts the rest of the Eurozone. Right now the rest of the Eurozone are not calculating the "potential" cost of Grexit, they are calculating the very real cost of capitulating in terms of their electability.

We are not even one month beyond the "agreement" so poorly patched together by all sides with such little grace and already they are back in the same situation. Threats from one side, resolute unwillingness to apply the sanctions on Greece. For Sanctions they are.

What do you think the eventual possible options are???

They are going to have to allow the Greeks to write another huge proportion of the debt off. I don't see any other way out of it.
The EU wants Greece in the Eurozone, Greece wants to be in the Eurozone. Forcing them out will humiliate the Greeks and increase anti-EU feeling there and may spread to places like Spain.
It may also encourage Marine Le Pen in France, who says if she is ever elected she will pull France out of the Euro.

So I think that for the EU the political risks of Greece leaving the Euro are too great, regardless of what the economics might be.

So..... it will be Grexit and the collapse of the Euro sometime soon.

That was TIC. Greece is not going to exit the Euro and the Euro will not collapse. The two sides will continue to square up like primary school gangs - 'my dad's bigger then your dad' - and fudge after fudge will continue.

Everybody knows that under the present rules Greece can never pay off the debt, so something has to give. Germany, France and the Netherlands own about 55% of the Euro with Italy, Spain and Portugal (IS&P, the other three basket cases) owning about 27%. The remaining 13 countries, including Greece, make up the other 18%.

Put another way: Greece's 2% is chicken feed in terms of Euro GDP, but its debt, at 175% of its GDP, is a killer - for Greece. The main creditors cannot write the debt off, in real terms, because it sends out the wrong message to IS&P. Nor can they punish Greece to the max, because that also sends out a dangerous message that IS&P would resist.

So, it is back to the fudge......

Yes I knew that was a bit of TIC sarcasm at the press and the way it is all portrayed...

Everything you say is true. But, when you mix in Elections, political grandstanding, press with bigoted blinkers and a whole host of other very human failings and what may be right; what may be sensible, has a funny way of heading out the front door whilst stupidity and insanity slink in the back door.

There is one other dynamic which I completely ignored and I should not have as I'm the first to mention it at other times.

The UK has an election in May. Force Grexit and Farage would have a field day. It would have changed UK politics and, possibly, given UKIP the same representation that Golden Dawn or Sweden Democrats have in their parliaments. Food for thought on that one.

They may not care much about losing Greece, but they care "very much" about the possibility of losing the UK. All that money and power to abuse, who could give up that???

If you see EU doors with the face prints of Tsipras and Varoufakis in the week following the UK elections, then you will know that the snakes in their gilded pit were speaking with forked tongue....

Almost as good as a soap opera....

Whether we see a Grexit or not before 2017 may depend very much on the result of the UK elections!